Exemption Snapshot
Maximum Deduction Cap
₹50,000
Annual IT Act Exemption
Potential Direct Tax Savings
₹15,600 / year
Cash kept in your bank
Eligible Tax Regime
Old Tax Regime exclusive
Budget FY 2026-27 Guidelines
How This Deduction Directly Lowers Your Monthly TDS
When you submit investment declarations to your company HR portal via Form 12BB, payroll calculates your projected annual tax liability after subtracting these statutory deductions, dividing the remaining tax evenly across 12 monthly payslips.
Frequently Asked Questions
Is the ₹50,000 NPS deduction under Section 80CCD(1B) over and above Section 80C?
Yes. Section 80CCD(1B) provides an exclusive deduction of up to ₹50,000 strictly over and above the statutory ₹1,50,000 limit of Section 80C, allowing a total deduction of ₹2,00,000.
Can I claim Section 80CCD(1B) NPS deduction under the New Tax Regime?
No. Individual contributions under Section 80CCD(1B) are only deductible under the Old Tax Regime. However, employer NPS contributions under Section 80CCD(2) remain eligible under the New Tax Regime.
Compare Old vs New Tax Regime for Your Salary
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